House prices see biggest yearly decline since 2009

House prices fell by 5.3% in August compared with the year before, their biggest annual decline since 2009, according to Nationwide.

The building society said the drop represented a fall of £14,600 on a typical home in the UK since house prices peaked in August 2022.

It said higher borrowing costs for buyers had led to a slowdown in activity in the housing market.

Mortgage approvals have also been about 20% below average levels in 2019.

Since December 2021, the Bank of England has raised interest rates 14 times in row in a bid to clamp down on rising consumer prices in the UK. The bank's base rate now stands at 5.25%.

That, in turn, has led to lenders raising their mortgage rates, putting increased pressure on homebuyers.

Nationwide's chief economist Robert Gardner said the rise in the cost of borrowing meant the fall in average house prices was "not surprising".

He said more expensive mortgages had resulted in activity in the housing market "running well below pre-pandemic levels".